January 18, 2009

Johnson administration abandons Russian Winter Festival

The first of the major international outdoor cultural events to be abandoned by Boris Johnson is the Russian Winter Festival - which should have taken place this weekend. This open air celebration, staged at the time of the New Year according to the old Russian Orthodox Calendar, that is in mid-January, had become a major annual London event.

The Russian Winter Festival was highly recommended by the national press, frequently on 'choice of the weekend' lists, was of high artistic quality, and attended every year in Trafalgar Square by well over 50,000 people.

But, in addition to being a good time for Londoners and their families, it also had a very serious economic purpose by being the major annual event in London's promotional drive in Russia – a market becoming of great importance to London's economy and therefore for Londoners incomes and jobs.

Russia became the single most important foreign section for foreign listings on the London Stock Exchange. In 2007 CIS (former USSR) companies raised over $19 billion in Initial Public Offerings (IPOs) on the London Stock Exchange. Trading volumes in 2008 for CIS companies were $477 billion. London had completely out competed New York in this market, with New York not floating a single major Russian company in recent years.

Russian tourists have become one of the most rapidly growing source of customers for London's West End – with annual rates of growth of increase in spending, which can be calculated from VAT refund returns, of over 40 per cent.

Russia's three votes on the International Olympic Committee were decisive in winning London the Olympic Games against Paris.

The positive consequences of this for London's financial, business services, tourist, and retail sectors is evident - all of which translates into incomes and jobs for Londoners.

The Russian Winter Festival generated large scale TV coverage in Russia – over 30 pieces of Russian TV coverage in 2007 alone for example. A few pieces of the coverage are put as videos at the end of this post. The equivalent advertising value to London in Russia of the TV coverage was several million pounds.

Given that no other city staged such a prestigious event it helped make London a welcoming natural home for Russian business people and tourists whose combined spending is worth hundreds of millions of pounds a year to London and is growing in importance. Whatever the ups and downs of political relations with the Russian government Londoners jobs depend increasingly on such international markets.

The Russian Winter Festival, in short, was an extremely smart piece of marketing - generating the equivalent of huge advertising for London in a key market and simultaneously giving Londoners a good time. Given the international financial crisis, and the fall in the exchange rate of the pound which makes London a still better value destination, London should be stepping up, not cutting, its international marketing efforts.

It is, therefore, typical of the Johnson administration's inability to judge the value of money for most things that it has abandoned the Russian Winter Festival.

Given Russia's importance in its three votes securing London the Olympic Games this will be dealt with separately – again because it shows how the international promotion of London under Ken Livingstone's administration secured huge economic benefits for London and why the present administration is incapable of winning any comparable major prize for London precisely due to both its economic incompetence, its complete failure to understand the nature of the modern international economy, and a consequent inability to understand what constitutes serious value for money.

Video - Coverage of the launch event of the Russian Winter Festival January 2008

Comments

You can follow this conversation by subscribing to the comment feed for this post.

We used to love attending this event. It was one the highlights and reasons for us to visit the UK capital. Though we don't any more. Killing such an important event shows tragic myopia on behalf of Mr Johnson.